Docs: correct post-M3 status and Ollama configuration

Three stale claims found in active documentation after the post-M3
consolidation:

- BUILD-MILESTONES.md still opened "M1 and M2 complete; M3 next", which
  contradicted its own M3 "Status: COMPLETE" block, planning/README.md and
  VERSION.md. It now states M1, M2 and M3 complete and accepted, M4 next.
- DEVELOPMENT.md described the settings row as "endpoint, model and (unused)
  API key" and sent "api_key":"" in its curl example. M2 removed the field;
  schemas.SettingsUpdate has no api_key. The prose and the example now match
  the real request shape. No application code was changed.
- README.md listed LM Studio as a supported local endpoint. ADR 002 and ADR 011
  make Ollama the only v1 backend; LM Studio is a rejected alternative there.
  The row is removed and the surrounding wording now says Ollama is the
  supported backend, same-host is the default, trusted-LAN Ollama is supported,
  public/cloud is prohibited, and the OpenAI-compatible adapter is an
  implementation detail rather than a support promise. The claude_shim section
  stays, relabelled "(development only)".

Documentation only; no code, schema or test changes.

Co-Authored-By: Claude Opus 5 <noreply@anthropic.com>
Claude-Session: https://claude.ai/code/session_01PWU4gTfLYY6Qq9U7aa9Qw2

DEVELOPMENT.md

@@ -91,15 +91,16 @@ decision that this project's threat model does not cover
 
 ## Pointing the storyteller at Ollama
 
-The endpoint, model and (unused) API key are **runtime settings stored in the
-database**, not environment variables. Set them on the app's Settings page, or
-with one request:
+The endpoint, the model and the generation parameters are **runtime settings
+stored in the database**, not environment variables. There is no API key field:
+M2 removed it along with the cloud providers, and Ollama does not use one. Set
+them on the app's Settings page, or with one request:
 
 ```bash
 curl -X PUT http://127.0.0.1:8000/api/settings \
   -H 'Content-Type: application/json' \
   -d '{"endpoint_url":"http://127.0.0.1:11434/v1","model":"qwen2.5:3b-instruct",
-       "api_mode":"chat","api_key":"","max_output_tokens":200,
+       "api_mode":"chat","max_output_tokens":200,
        "context_token_budget":4096}'
 ```